New Zealand: Business confidence falls further into negative territory, and business activity eases in April
April 30, 2018
The ANZ Bank Business Outlook indicator showed that a net 23.4% of surveyed firms were pessimistic about the year ahead in April, down from March’s minus 20.0%. As a result, the indicator moved further below the net-0% threshold that separates optimism from pessimism among firms. A breakdown of the sectors reveals the construction sector took a big hit in April, with confidence plunging to the lowest level in 10 years. In addition, the retail, manufacturing and services sectors also grew more pessimistic. Meanwhile, sentiment in the agriculture sector improved slightly, but it remained the most pessimistic sector.
Similar to the confidence reading, firms’ view of their own activity—a metric which has a stronger correlation to GDP growth—dropped from +22 points to +18 points. Most activity indicators recorded declines; firms’ export, investment and employment intentions dipped, and profit expectations contracted. Capacity utilization expanded, however, and fewer firms expected difficulties in obtaining credit.